Specification and Estimation of Equilibrium Search Models

This paper considers estimation of a pure equilibrium search model in which all heterogeneity is endogenous and due to information asymmetries, and of variations that allow better fits to the data. Measurement error and heterogeneity in the productivity levels of firms. The model is fit to a random sample of individuals representing 1% of the Danish population in the age group 16-75 years over the period 1981-90. All specifications are fit by maximum likelihood and provide readily interpretable parameter estimates. Variation in estimates across demographic groups is discussed. Several parameters are common across specifications, and their estimates are reasonably robust. (Copyright: Elsevier)